You are using an unsupported browser. The experience will be lacking unless you upgrade. We recommend Firefox, Chrome or Edge. Sorry for the inconvience.

Want us to let you know when we publish new articles?

Enter your email below and we will make sure to keep you up to date on all things ACA

Ask for a Receipt – How an Employer Can Verify Its Service Provider Timely Filed On Its Behalf

March 11, 2024

The deadline to provide the 2023 Forms 1094-C and 1095-C to the IRS is April 1, 2024 (as a result of March 31, 2024 landing on a Sunday). While this is the ninth time employers who have been Applicable Large Employers since the Affordable Care Act’s (ACA’s) reporting requirement kicked in, many employers are still making easily avoidable mistakes. At the top of the list of easily correctible mistakes is timely filing the Forms 1094-C and 1095-C. In private practice I have recently seen the IRS begin to provide pushback against employers who have failed to timely file the Forms 1094-C and 1095-C and insist that the employer pay a penalty of up to $310 per late return!

As a result of the number of Forms 1095-C many employers file, this penalty can quickly grow into a staggering amount. Furthermore, this figure is double as a result of the IRS being able to essentially double the penalty under a separate Internal Revenue Code section (IRC section 6722) for not having furnished the Form 1095-C to its employees as is still required despite there being no individual mandate. Consequently, when thinking about this issue employers should really view this penalty as $620 per late return! For example, if an employer filed 100 Forms 1095-C late, the employer could be liable for $62,000 of penalties

One scenario I have seen repeatedly in private practice is the employer assuming that a service provider has filed on its behalf when in fact no Forms 1094-C and 1095-C have been filed with the IRS. Initially, the IRS was lenient with this scenario and the IRS would generously abate these late filing penalties. However, the trend I have seen lately is the IRS appears to be less inclined to do so. I’ve seen this scenario too many times to count and it can be fixed with a simple one-line email sent by the employer to the ACA reporting service provider.

The typical scenario involves the employer using a payroll provider, frequently one of the biggest players in the space, to handle a host of the employer’s payroll needs including but not limited to tracking hours, issuing paychecks, and reporting certain tax forms to the IRS. In the scenario I have seen way too many times in private practice, there is confusion between the employer and the payroll provider as to the services that are actually being provided. All too frequently the service provider is not submitting the Forms 1094-C and 1095-C to the IRS on behalf of the employer despite performing other payroll functions for the employer. The employer is under the impression that the service provider is filing the Forms 1094-C and 1095-C on the employer’s behalf, but the service provider does not file these Forms with the IRS.

Years pass and eventually the employer receives a letter from the IRS asking about the Forms 1094-C and 1095-C. Frequently, this has led to the employer receiving a late filing penalty. Recently, the IRS appears to have shifted its position and not allowed these late filing penalties to be abated. Therefore, every employer should ask its ACA service provider for a receipt ID prior to April 1, 2024.

The receipt ID is a collection of letters and numbers a service provider (or an employer if the employer is self-reporting) receives when the service provider submits the Forms 1094-C and 1095-C to the IRS on behalf of an employer. This will give an employer confidence the Forms have been filed with the IRS and evidence as to the timeliness of the filing should there be issues with the filing in the future. Every employer needs to ask its ACA service provider for the receipt ID in 2024.

Below is a concise email an employer can email its service provider:

Can you please provide the receipt ID for the 2023 filings of the Forms 1094-C and 1095-C with the IRS? Thanks.

Accord Systems has been documenting its clients’ receipt IDs since the inception of reporting. While it has seldom been an issue for our clients due to the timeliness of our filing, it is good to have the receipt ID clearly documented, which we do in our transmissions section of our software. If you have any questions regarding Affordable Care Act reporting or would like to learn more about our services, please contact us.

About the author – Ryan Moulder serves as General Counsel at Accord Systems, LLC. Ryan received his LL.M. from Georgetown University Law Center and his J.D. from Saint Louis University School of Law. He has distinguished himself as a leader in the Affordable Care Act arena and has written and spoken on a variety of ACA topics as it relates to compliance for companies.

Legal Consent

The information contained on this site is not, nor is it intended to be, legal advice. An attorney should be consulted for advice regarding your situation. Copyright © 2024 by Accord Systems, LLC. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.